SAO PAULO (Reuters) - Brazilian credit card processor Stone Pagamentos SA is planning its initial public offering in New York by the second half of the year to raise funds to compete with larger rivals Cielo SA (CIEL3.SA) and the Rede division of Itaú Unibanco Holding SA (ITUB4.SA), three people with knowledge of the matter said.

A trader works on the floor at the New York Stock Exchange (NYSE) in Manhattan, New York, U.S., December 28, 2017. REUTERS/Andrew Kelly

Stone and investment banks have discussed a transaction in which the company would raise money and some shareholders would sell part of their stakes, the sources added, requesting anonymity because the talks are still private. Stone has not yet hired advisers.

Other shareholders include 3G Capital Inc founders Jorge Paulo Lemann, Marcel Telles and Carlos Alberto Sicupira, as well as Madrone Capital Partners, a U.S.-based investment firm that manages part of the fortune of the Walton family, the majority owners of Wal-Mart Stores Inc (WMT.N).

In a statement, Stone said there was “no ongoing share offering.” Actis declined to comment. Gavea and Madrone did not immediately comment.

RACE TO GROW

Stone would be the second Brazilian card processing company to go public this year, as industry competition increases during a nascent economic recovery after the country’s harshest recession in decades.